Ministry of Commerce And Supplies - Enhanced Integrated ...

N T I S2010Cost and Quality of Infrastructure: High costs of electricity. But the costs of other infrastructures areconsidered reasonable.Efficiency of Domestic Supporting Industries: All materials are supplied by domestic collectors, middlemen,and traders. Their efficiency and improvement in quality of raw herbs depend on the prices and training.Domestic Demand: Demand for more than 20 herbs being used for essential oils is increasing and out of these11 herbs are being cultivated 36 under contract farming systems and through community forest users groups(CFUGs).Business Environment: There are no legal restrictions for investors, such as for repatriating profits and capital.However, high informal costs affect the industry.Government Initiatives and Donor Involvement: Expansion of the Community Forestry Programme and MAPsDevelopment Programmes under the Master Plan for the Forestry Sector (MPFS) 1989, Forest Act 1993 andPlant Protection Act 1972 has complemented commercial prospect. Herbs and NTFP Development Policy 2004is not being effectively implemented in absence of clear targets, strategic programmes, adequate regulatoryframeworks, and institutional mechanisms. The Herbs and NTFP Coordination Committee has not been veryeffective in the commercialization of herbs. The Department of Forestry, Department of Forestry Researchand Survey, and the DPR are taking lead roles in policy formulation, research and development, conservationand farming for the promotion of sustainable management and use of plant resources. Thirty plants havebeen identified for priority research and sustainable farming in Nepal. The DPR also has two laboratories fornatural products, herbarium and plants, eleven botanical gardens 37 , and seven district offices. Internationaland bilateral donor agencies involved in the herbs and aromatic plants sector include ICIMOD, RECAST, GTZ,SNV Nepal, WWF-KCAP, ANSAB, and IEDI. 38Prospect for Domestic Supply Conditions: Only 20-30 per cent of the naturally available stocks of identifiedherbs are collected, processed and traded. There are medium and long-run prospect for further utilization ofexisting species and identification of new species that are in demand. More than 90 per cent of the collectedcrude herbs are exported to India without processing and some of the restricted species are smuggled. Furtherinvestments in technology, training in product development, production and marketing are needed to achievediversification and growth.Index 4: Socio-economic ImpactCurrent Employment and Job-Creation Prospect: It is estimated that the sector gives FTEE to about 10,000people in Nepal. 39 This includes 8,000 persons in collection, 1,000 in intermediary trading, and 1,000 inprocessing and trading houses (NHHPA).Gender Impact: Mostly women are engaged in the collection, cleaning, and grading of herbs. It is estimatedthat more than 50 per cent of workers are female.Contribution to Skill Development: Traditional skill is passing through the younger generations, butfurther training is needed for waste minimization, improvements in the value chain and natural resourcesconservation.36MAP being cultivated include Asparagus recimosus, Chammomile, Citronella, French Basil, Holy Basil, Lemongrass, Mentha arvensis,Palmarosa, Swertia Chirayita, Withania somanifera and Xanthozylem armatum (Timur).37There are 11 government botanical gardens, including the National Botanical Garden of Godavari, with more than 357 ha of land for thecollection and conservation of herbal and other plants in Nepal.38Yubaraj Pokhrel and Govinda Ghimire, Seabukthorn, “Prakriti”, Nepal Herbs and Herbal Products Association, Quarterly, Year 3, No2, p. 29,Magh 2063.39Calculation of full employment is based on the earning of US$1,000 per full-employed person, who approximately earns Rs.200 per day.NEPAL TRADE INTEGRATION STRATEGY 2010BACKGROUND REPORT59